How performance management is strategically important to firms Performance management is a formal, structured process used to measure,evaluate, and influence employees’ job-related attitudes, behaviours, and performance results. Performance management serves many purposes in organizations: 1-Enhancing Motivation and Productivity: An employee’s motivation to perform well is determined by how responds to three key questions: • The expectancy question(‘If I make an effort, will I be able to perform as intended?’) • The instrumentality question(‘What consequences, if any, will follow from my decision to perform?’) • The valence question(‘How much do I value the consequences associated with the intended behavour?’)
How performance management is strategically important to firms2-Supporting Strategic GoalsDefining goals and their measures is an important part of the perfomance managementprocess.When goals have a direct and obvious link to strategic goals and to the firm’ssuccess factors, two benefits occur:• Employees better understand their organization’s strategic focus and how their jobs fitwith it.• The goals direct employee behaviours toward activites that are consistent andsupportive of the organization’s strategy.3-Strategic Planning, Alignment and ChangePerformance measures provide valuable information for use in strategic planning andorganizational change.• Detecting Problems :for example; declining sales performance may point to adeficiency in training.• Evaluating Change: Employee performance measures should be a key component ofa plan for evaluating the success of a change initiative.
How performance management fitswithin an integrated HRM system HR Activities Performance Management PracticesExternal Performance MeasurementEnvironmentLegalLabor marketNational Culture Feedback and Follow up Internal Environment Objectives of Performance Strategy Culture Measurement And Feedback Technology If no improvement make adjustments
The responsibilities of the HR Triad for performance management LINE MANAGERS HR PROFESSIONALS EMPLOYEESWork with 2+3 to develop Work with 1 providing job analysis Work with 1+2 to set performancevalid performance measures data expectationsUnderstanding of errors Train everyone Appraise the work of othersMeasure and keep records Coordination and feedback ParticipationFeedback to employees Train 1 for feedback Seek and accept feedbackFeedback own performance Train self-managing teams for Learn to give feedback feedbackDecision making Monitor managerial decisions Understand performance expectationDiagnose deficiencies Train self-managing teams for Learn to diagnose causes of deficiencies deficienciesWork with 3 to develop Ensure 1+3 to deal with deficiencies Work with 1 to developStrategies improvement strategiesProvide resources Provide personal assistance to 3. Develop goal setting and self- management skills
Several ways to measure performance• Performance criteria: are the dimensions against which the performanceof an incumbent, a team or a work unit is evaluated.organizations can use three types of criteria:Personal Traits focus on personal characteristics, such as loyalty, dependability,communication ability and leadershipBehavioral Criteria focus on how work is performed.Objective Results focus on what was produced rather than how it was produced.• Weightning the criteria: Job analysis
The timing of the performance measurement and feedback The timing of performance measurement should reflect strategic considerations. But often the timing of performance measurement and feedback is driven by convenience and tradition.The three most common approaches: 1-Focal Point:Performance measurement for all employees occurs at approximately the same time. Advantage:Comparison-everyone-same time Disadvantage:Too much work –same time-artificial productivity 2-Anniversary Approach:distributes the task of reviewing performance and providing feedback over the year. Disadvantage:Individual-team performance,comparison. 3-Natural Time Span of the Job
The participants in performance measurement and feedback To compensate for the disadvantages of gathering data from any single source, most large organizations involve multiple participants when measuring performance and providing feedback. • Supervisors • Self-Appraisal • Peers • Subordinates • Customers • 360 – Degree Appraisals
Appraisal formatsInvolves evaluating performance based on the judgemets andopinions of subordinates, peers, supervisors, other managersand even the employees themselves.Norm-Referenced1.Straight Ranking2.Forced Distribution.Absolute Standards Formats1.Graphic Rating Scales2.Behaviourally Anchored Rating Scales3.Behavioural Observation ScalesResult-Based Formats.1.Direct Index Approach2.Management by Objectives
The rating process Common Performance Rating Errors Halo and Horn :sex,age,race Leniency: high rated Strictness: low rated Central Tendency: ‘play –it- safe’ average rating Primacy:Initial information to categorize Recency:Recent results Contrast Effects:Comparison of different levels. Improving Rater Accuracy Rating Scale Format: •A single job activity •Rate separately •Do not use term ‘average’ Provide Memory Aids Provide Rater Training Reward Accurate and Timely Appraisals Use Multiple Raters
Providing feedbackThe feedback makes employees aware of any problems and should adress theimportance of change when applicable. Many managers feel uncomfortableproviding feedback to employees.Different perspective,egos,defence,discussions...Timing:Immediate feedback is most useful.Continous,from several sources andas much info as reciever can use.Preparation:Before the actual interview decision has to be taken is it one way orinteractiveContent of the Discussion:The most useful feedback sessions focus onsolving problems and planning for the future.Problem solving involves diagnosingthe causes of performance.Diagnosis:The objective of diagnosis is to understand the factors that affect anemployee’s performance.Training in problem solving and in giving and receivingfeedback should be provided.Removing Roadblocks: Action plan: Supervisor should adress lack ofresources,feedback,Subordinate should adress behavorial changes,careerdevelopment activities...
Two current issues related to performance management• Automated Performance Management Technology can automate the process by tracking goals,scoring and approving appraisals and processing the data for use in determining compensation, training ,planning and recruiting.Customer satisfaction,managers ratings etc..the technology allows organizations to convert a great deal of data into usable information.Efficiency,time saving,accuracy.• Monitoring Through Technology Handscanners-attendancy,GPS devices –location,softwares-emails,internet activities It concerns privacy.Must find a balance between benefits and privacy.How ? Communication and training.